“The affirmations reflect HeidelbergCement's careful financial policy and the agency's expectation that credit metrics will remain stable or improve slightly in 2012, even in the current uncertain scenario for the cement markets,” the rating's agency said.

Fitch expects trading conditions to remain difficult in 2012, particularly in western Europe, where volumes will remain depressed. Under its conservative assumptions, the agency does not forecast major improvements to come from North America, although the Q112 results of major cement companies suggest that both prices and volumes could see some recovery. In emerging markets, Fitch believes that cost inflation, although easing compared to 2011, will remain the major issue putting pressure on margins.

In such a scenario, Fitch expects HeidelbergCement will be able to maintain or slightly improve EBITDAR in 2012, thanks to cost cutting and the increase in cement volumes sales. By contrast, the agency forecasts free cash flow (FCF) will deteriorate due to higher capex and dividends, but to remain positive. The disposal of non-core assets should also drive debt reduction. (Source: Reuters)